A Team Offense

CS and Sales working together leads to happy customers, upsells, and best of all — high renewal rates. Most organizations go about this in the wrong way in the beginning; they define Customer Success as a role that puts out fires reactively, usually as a result of product or sales failures, and a misalignment between all teams.

In order to prevent this phenomenon from occurring, the best solution is to have Customer Success team up with the Sales team. However, the question is whether it is a realistic expectation, since each company has their own model for Sales cycles, and varying practices for renewals, upsells, and cross-sells. In most subscription-based product offerings, the customer journey is long, and most revenue is harvested after the first close of the deal. While this makes it difficult to engage Sales team members long term, it’s useful to take a team selling approach.

Team Selling

Let’s understand why is it so important to closely align with Sales. In a high touch model in which it takes extensive amounts of time to get value from deal – customer lifetime value is amortized over a series of renewal periods. The customers do not get value until the data is flowing. The usual scenario in such organizations is that new logos only account for 10-15% of the revenue harvested, and the rest is garnered by focusing on penetration in existing accounts. The strategy is to land and expand, in an extremely high touch model, that we can call a high-high touch. In such a scenario, two critical things must occur – CS must be tightly aligned with Sales, and should always proactively be on offense, looking for openings for upsells, cross-sells, and positive engagement that could lead to external customer advocacy.

The metrics to track here to make sure teams are hitting their mark is to look at renewals in terms of dollars, and in terms of the number of accounts retained. That way, you can gage if the increase in profits is due to new accounts and the Sales team’s efforts, and whether CS has managed to not only retain accounts, but also expand the revenue each one brings in. It’s also important to track customer sentiment to see whether the customers are satisfied with the progress in their accounts. If they are unhappy, it’s good to know ahead of time to proactively prevent churn by having the CS team reach out. With support from enterprise heavyweights in your customer base, it will help validate your product’s capabilities and effectiveness in important accounts. Once first value is delivered with the group effort of Sales and CS, CSMs can take over and concentrate on growing value on an ongoing basis.

Challenges for Alignment

The Sales team’s goal is simple – to reach and possibly exceed their quarterly targets. Unfortunately, this does not position them to be particularly open to partnering with the CS team because it takes away time that could otherwise be spent looking for new accounts. Since the Sales team has the carrot of cash bonuses for deals closed dangling in front of their face, they will have to be incentivized monetarily to cooperate with CS. Another strategy to make this partnership work is to have people who work as liaisons between the two departments, which will facilitate an ongoing strategy dialogue and ease of coordination.

Another issue that can occur is the Sales team, in a rush to close deals, focus on the wrong types of customers who can either never be successful with the product, or are extremely difficult for one reason or another. Naturally, Customer Success Managers will resent these candidates because they add another unnecessary number to their churn list. Sales will say it’s the CS team’s responsibility to retain them, while CS will say they were the wrong type of candidate to begin with! Where can we go from this stalemate? The key is to incentivize the Sales team to get each account they close to the point of first value. That way, Sales has to cooperate with CS to get the customer onboarded and functional, before they transition back to their initial role as a hunter. Then, CS can nurture and grow the account as they are meant to.

The only potential wrinkle in this plan is that customers operate on their own timeline. Executives have to be briefed and give their go-ahead, financials have to be put in order, and differing agendas have to be accounted for. By the time the customer is ready for training and onboarding, it could be months after the initial contract was signed. In this case, Sales is unlikely to even remember the customer, unless they are invested in a positive outcome. It’s like all startups, if you give your employees significant equity, they will feel it necessary to stick around for the long haul. In the off-chance that problems with implementation occur within the vendor’s team, it is better to have both Sales and Customer Success following up with Engineering and Product teams to make sure bugs are fixed as soon as possible. Having two teams clamor for updates will hopefully make fixes come faster.

Sales to Customer Success

Goals of Aligning with Sales

The best way to get executive support for Sales’ alignment with CS is to show how it directly supports top line business KPIs. If you can show revenue benefits, then you’re in the clear for getting the go-ahead to pursue your project. The issue is, how can you validate your efforts unless you get a chance to try them out in the first place? The first step is to show how the CS team’s efforts have increased profits. Then, when in budget meetings to make your case for next year, talk about how a tight alignment with the Sales team would allow you to perform even better. The first step is to lay out a detailed plan. Determine who does what, and how it is aligned for the betterment of long-term account health.

There should be a strategy plan for all new and retained accounts, on the collective and individual scale. Weekly account update calls will allow everyone to stay on the same page, and set agendas for the next week and review the successes of the previous week. The goals of this alignment should be made crystal clear with the main objective of increasing renewal rates, expanding retention, and identifying key opportunities for cross-sells and upsells. This will allow you to ensure you harvest the full customer lifetime value of the account. Key KPIs to monitor are the rate of increase in product adoption, overall customer satisfaction and happiness, and NPS scores over time. All activities should be conducted with the possibility in mind that this customer could become a positive reference to other leads, so all interactions should be consciously cultivated with this target in mind. Additionally, the CSM on each account needs to be fully responsible for quantifying the customer experience, their engagement with the product, and how their happiness reflects their company’s satisfaction with your product.

Next Week…

In my next post, I’ll discuss how to sustain this partnership with Sales, the different models that this partnership can take, and tips so that all parties remain satisfied with the arrangement.

Have you tried a CS & Sales partnership? What challenges and benefits did you find?

Mark Pecoraro is a senior business executive and trusted advisor to leadership teams with a demonstrated ability in consistently delivering high customer satisfaction, client retention and operational excellence in a recurring revenue business model for both start-up and established businesses. He currently is VP of Customer Success for Conviva and is a recognized thought-leader in Customer Success. He has held a variety of executive roles in enterprise SaaS organizations including Appcelerator, SOASTA, WhiteHat Security and Accept Software. He also serves on the Board of Advisors for StrikeDeck and BlueNose Analytics, and is a member of the Standards committee for The Customer Success Association.

Mark Pecoraro

VP of Customer Success, Conviva